. Which of the following could cause a doubling of the price-earnings ratio (P/E) for a stock?

a. Earnings dont change but investors are willing to pay twice as much

b. Earnings fall in half but the stock price doesnt change

c. Earnings per share doubles

d.Both a and b

3. All of the following are assets of a bank EXCEPT a. Cash

b. Deposits c. Loans

d. Securities

4. Net Profit Margin is calculated after deducting interest and taxes from earnings because

a. The only income available to owners is after interest and taxes are paid

b. Income after deducting interest and taxes lowers the tax bill

c. Interest and taxes are non-cash expenses for accounting purposes

d. All of the above

5. Which of the following is NOT a characteristic of money?

a. It is generally accepted as payment for goods and services

b. It is a store of value

c. It is a standard of value

d. It is a source of value

6. Which of the following is NOT a characteristic of money?

a. It is generally accepted as payment for goods and services

b. It is a store of value

c. It is a standard of value

d. It is a source of v

7. Each of the following is typically found on an Income Statement EXCEPT

a. Cost of Goods Sold

b. Interest Expense

c. Shareholders Equity

d. Depreciation

8. The two general ways of addressing the Principal-Agent problem are

a. Prosecution and Conviction

b. Alignment and Oversight

c. Treasury and the Federal Reserve

d. Accounting and Auditing

9. An annual report typically contains all of the following EXCEPT

a. Highlights of financial results

b. Letter from management

c. Statement of Incomed.

d. Letter from Credit Agency